Hertz has been successfully renting cars to drivers as young as 20, finding that even though drivers between the ages of 20 and 25 are a higher risk than the market at large, they're a profitable segment.
Hertz has been renting to the under-25 segment for about seven years, starting first with the 21-to-25 age group. About three years ago, Hertz began renting to drivers as young as 20. It saw the benefits of renting to younger drivers after introducing its car-sharing service in 2008 on college campuses.
"That's when we got hard-core data on this market," said Yvonne Humphreys, senior director of product management for Hertz.
She said that even though younger drivers "definitely damage vehicles more frequently," they are an excellent market, in part because their choices are limited as far as companies who'll rent to them.
"We want to bring them into the Hertz franchise as lifetime consumers," Humphreys said.
To counter the misperception that those under 25 aren't eligible to rent cars, Hertz became the official car rental partner of Live Nation, the concert promoter.
In partnership with Live Nation, Hertz ran a Best Seats Sweepstakes last summer. It gave away a grand prize of a fly/VIP Drive trip for two with VIP seating to one of 49 concerts. Depending on which concert the winner chose, those seats could be in a Chevrolet Camaro SS convertible situated in the VIP section of the venue.
Those under 25 do pay a premium to rent. They pay an extra $15 a day for standard cars and an extra $25 for larger vehicles. Under-25 drivers are not limited in their choice of vehicles and can rent convertibles and trucks.
The rentals are commissionable, but not the premiums.